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The message delivered by the 2010 mid-term election is clearly in the eye of the beholder. Some see it as a repudiation of President Barack Obama and/or Democrats in Congress. Others see it as a rejection of incumbents of all political parties. Most everyone agrees, however, that this was an election demanding change. There are other blogs that do a great job of noodling through these kinds of issues. This blog focuses on health care reform. And while I believe the Patient Protection and Affordable Care Act will be changing over the next several months, the process won’t be easy.

The difficulty is only in part because a divided Congress is a guarantee of frequent gridlock. Consider the Kabuki Theater we’ll see play out on repeal of the PPACA. My guess is Republicans in the House will push through a bill to repeal the new health care reform law. This legislation may contain language to preserve certain provisions of the PPACA, but it will be dubbed the “repeal bill.” Not that the GOP majority needs their votes, but a handful of Democrats will likely vote for this bill despite pressure by the Democratic leadership to present a unified front (Democrats aren’t nearly as disciplined as Republicans in this regard, so someone is likely to jump ship).

Democrats in the Senate will kill the bill – and will likely prevent it from coming to the floor. Either party can filibuster. Even with with a few Democratic defections (that would be Senators Joe Lieberman, Ben Nelson and Joe Manchin) the GOP will fail to garner the 60 votes necessary. So President Obama won’t even need to veto the bill as it will never get to his desk.

This script, or something much like it, has nothing to do with public policy and everything to do with politics. Each side will be playing to their base. You might even see liberal Senate Democrats put forward legislation to implement a public option or the like, safe in the knowledge that such a bill would die in the House. Again, it’s all about making partisans (and pundits) happy.

Speaker Pelosi has announced she’ll seek to become the Minority Leader in the new Congress. This no doubt delights many Republicans in the House and saddens some Democrats. As the Associated Press reports, in making the move to stay on as House Democratic leader, Speaker Pelosi “rejected pressure from moderate House Democrats – and even some liberal allies .…” Again, other blogs will dissect the broader political impact of this move. But what does it mean for health care reform?

Unfortunately, Speaker Pelosi’s decision to stay on as the Democratic leader in the House means improving the Patient Protection and Affordable Care Act will be much harder than would be the case with someone else leading the Democratic caucus. First, because Speaker Pelosi is a lightning rod for conservative anger. Speaker-to-be John Boehner will have a tough enough time getting his caucus to vote for anything short of repeal of health care reform. The GOP Caucus in the House will contain a significant number of true believers: ideologues who consider compromise a mortal sin as opposed to a natural part of the political process. And even those Republican lawmakers prone to compromise will spend the next two years looking over their right shoulder evaluating whether a vote for half-a-loaf on an issue will have career-ending consequences. Getting these compromise-shy politicians to accept a deal brokered with Minority Leader Nancy Pelosi may be asking too much.

The second reason her decision makes improving health care reform more challenging is that it means no change among the negotiators. The Big Five in Washington for the past two years have been President Obama, Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, Speaker Pelosi, and Minority Leader Boehner. Assuming no challenge to the two Senators (and none seems to be emerging) and with the likelihood of the House leadership simply switching offices, the same Big Five will be negotiating health care reform for the next two years. Meaning no new perspectives, no change in tone, no difference at all (other than the relative power each holds). As anyone whose survived basic chemistry in high school can tell you, if you have combine the same ingredients in the same way expect the same results. For those of us looking for improvements to the PPACA, this is not a good thing.

Democrats in the House could choose someone else as their Leader, but Speaker Pelosi is an excellent vote counter. I doubt she’d have announced her intentions without be certain they’ll be achieved.

A lot of the Democrats defeated on November 2nd were moderates – the Blue Dog Coalition in the House will be roughly half the size in the new Congress as it was in the old one. This means the Democratic caucus is more liberal going forward than it has been in the past. And given the success of the Tea Party the Republican Caucus has grown even more conservative. The gulf between the two, consequently, is greater than ever and there a fewer bridge builders to help span it.

Changing the PPACA is important. Having the same faces among the Big 5 and more extreme caucuses in the House doesn’t mean revising health care reform will be impossible. But it does mean achieving that change will be harder.

The 2010 mid-term elections were one of those elections. One that changes everything … forever. We haven’t had one of these game changing elections since, well, 2008. Which apparently defines “forever” as meaning “two years.” So before the next tsunami/landslide/other metaphor for lots of changes election in 2012, what will be the 112th Congress’ impact on health care reform? What follows is my take on what can and/or should happen in the next two years along with some broader political observations. Like the predictions available 24×7 on Talk Radio and cable “news” shows, they may be wildly off-the-mark. I also may change them at any time (consistency not being a high priority among broadcast pundits). Hopefully, this perspective will provide some grist for your own thinking about the future. Please feel free to share your predictions and observations – just remember to keep your comments civil.

1. Who Will Lead? While we assume we know who the major players will be for the next two years, we don’t know for sure. Yes, President Barack Obama will remain president. And it is all but certain that today’s Minority Leader, John Boehner, will become Speaker John Boehner. While some talk of a challenge from conservatives against Senate Minority Leader Mitch McConnell, that’s possible, but unlikely. With his come from behind victory Tuesday night, Senate Majority Leader Harry Reid would be expected to remain in that post. Then again, he bears substantial responsibility for the heavy hit his caucus just took. A challenge to Senator Reid is not beyond the realm of the possible, it’s simply not likely. Then there’s current Speaker Nancy Pelosi. Dethroned Speakers have retired from Congress before (think Newt Gingrich and Dennis Hastert). Speaker Pelosi could seek to serve the Democratic Caucus as Minority Leader, but there’s no guarantee she’d be elected. We’ll know more in a few weeks, but there could be some new players in leadership roles. This could change the tenor and tone of negotiations. Then again, nothing might change at all.

2. Why Republicans May Let PPACA Stand. The Patient Protection and Affordable Care Act will be amended. Whether those changes are substantial or not is in the hands of newly empowered Congressional Republicans – and, as noted below, a few Democrats). The GOP, both from ideological disagreements with President Obama and political calculation gave no support to the Administration’s major legislative goals. Unified Republican caucuses in both Chambers of Congress worked to deny the President any support – at times even when the President was promoting or at least open to GOP positions. And they were rewarded with a political landslide of historical proportions. With 21 of the 33 Senate seats up for election held by Democrats and the Presidency on the line in 2012, why mess with success? (OK, besides a desire to solve problems). If the strategy is to deny the President accomplishments upon which he can campaign for reelection, then “fixing” his flawed health care reform plan is counterproductive. Better to let things remain as they are then hope to ride displeasure with the PPACA to majorities in Congress and a Republican President in the White House. Is this a cynical perspective? Perhaps. But given the promise of “no compromise” from Representative Boehner and Senator McConnell’s statement that Republican’s “single most important thing we want to achieve is for president Obama to be a one-term president” perhaps not.

3. Why Republicans May Improve the PPACA. Then again, the Republicans may decide to fix a lot of what’s broken in the Patient Protection and Affordable Care Act. And even add some needed additional reforms to the package. The “just say no” political strategy carries some heavy risk. Republicans already have a worse “favorability gap than Democrats. (Exit polls indicate that 43 percent of voters have a favorable view of Democrats while 53 percent view them unfavorably while 41 percent viewed Republicans favorably and 53 percent viewed them unfavorably). Other polls show the public wants Republicans and Democrats to work together to get things done. Now that they have power, the public may punish the GOP if they fail to deliver results. “Fixing” health care reform would demonstrate Republicans understand their responsibility to move beyond gridlock. Some changes will be easy; others much harder. But a vibrant debate – and some political compromises – could also enable Republicans to achieve long held goals like medical malpractice reform and improve the cost containment provisions of the new health care reform law. At least one can hope.

4. Vice President Biden May Determine the Fate of Health Care Reform. When the dust settles, the Senate Democratic Caucus will have 53 members (assuming Senator Pat Murray’s lead in Washington continues to grow) while there will be 47 Senate Republicans (which recognizes that whoever Alaska elected to the Senate will caucus with Republicans). However, one member of the Democratic Caucus is Senator Joe Lieberman, a conservative Independent who frequently sides with Republicans. And with a tough reelection campaign facing him in 2012 he might switch over to Republicans with the right inducement. Then there’s the Senate’s most conservative Democrat, Senator Ben Nelson of Nebraska. He too often sides with Republicans. Concerned about his reelection in 2012 he too might support Republican efforts to amend the PPACA. Enter stage right Governor and future Senator from West Virginia Joe Manchin, who may prove to be even more conservative than Senator Nelson. Governor Manchin has said that he “favors repealing things that are bad in [the PPACA]” and describes President Obama’s health care reform as “overreaching.” If these three members of the Democratic caucus – and only these three – join a united Republican effort to change major aspects of the Patient Protection and Affordable Care Act the Senate would deadlock, leaving Vice President Biden to cast the decisive vote. Who says being Vice President is a boring job?

5. Be Careful What You Wish For. If gridlock is avoided, what might change in the PPACA? The low-hanging fruit involves lowering administrative burdens imposed by the Patient Protection and Affordable Care Act that have little value. Examples include provisions impacting W-2s and 1099s (In a press conference today President Obama talked about the need to reduce the burden of the PPACA’s 1099 requirements). Republicans might want to make it easier to achieve grandfather status and thus enable some employers and consumers to avoid certain requirements of the PPACA. They will push for medical malpractice reform and may offer some additional measures to control costs. And Republicans could (and should) make the premium subsidies created by the PPACA available for use outside of the government exchanges. This would create more competition and choice for consumers and employers, a cause the GOP could easily champion. Republicans are unlikely to do away with the medical loss ratio requirements included in the health care reform law, but they might redefine elements of it. For example, they could recognize the wisdom of excluding broker commissions from the MLR calculation altogether (OK, this may be wishful thinking). Republicans are unlikely to seek to eliminate exchanges – they have been a part of the GOP’s health care reform proposals for years. They will seek to do away with the individual mandate, even though doing so would result in skyrocketing premiums. In other words, some improvements pushed by Republicans could make health care reform worse.

6. Obama Has Already Won. Here’s an observations folks may not like, but if you think about it, when it comes to health care reform, President Obama has already won. No one that I’m aware of is calling for a return to the status quo. Even the Republican campaign mantra was to “repeal and replace” the Patient Protection and Affordable Care Act. Yes, his particular reforms may cost the President a second term and certainly cost some lawmakers their job, but these are short-term impacts. Long term President Obama accomplished what predecessors of both parties tried and failed to do – pass substantial health care reform. Even if Republicans could repeal the new law (and they can’t given their inability to muster veto-proof majorities) they would need to replace it with something. And that something will not be a return to America’s health care system circa 2008. You may not like the Administration’s reforms. Those reforms may need reforming. But it cannot be denied that President Obama delivered on his campaign promise to forever change America’s health care system.

6. Change Will Change. There has been a lot of discussion on this blog – some of it quite heated – concerning the impact of the PPACA in general and on brokers in particular. As I’ve noted frequently, the health care reform law itself is not the end reforming health care. The PPACA is only the start. Much of the law remains to be interpreted by federal and state regulators and then those regulations will in turn be interpreted by employers, carriers and others. Even if Congress gridlocks on major revisions, some change to the PPACA will emerge from Congress in the next two years. And Republicans in the House will certainly seek to impact implementation of the law through through Congress’ budget and oversight powers. The PPACA is health care reform that needs reforming. My hope is that we get those changes. But whether they’re the right changes or not, there will be change.

There’s one thing certain about the 2010 election results: they assure an interesting 2011.

Passing major health care reform was never going to be easy. The issues are hard. Partisanship in Washington has rarely been greater. The status quo may be a road to disaster, but it’s a familiar road. Moving America’s health care system in a new direction is a Herculean task. Yet for the past year or more, most observers considered passage of some legislation a better than 50/50 proposition. Now, with negotiations over reconciling differences between the Senate and House versions of reform bills comes down to the wire, what are the chances of Congress passing a bill President Barack Obama will sign into law?

All of this is some evidence that health care reform could be in trouble. My opinion: passage of health care reform is more likely now than it was in December. Here’s why:

First, Senate Majority Leader Harry Reid, Speaker Pelosi and President Obama are closer than ever to an agreement. "’Prospects of reaching agreement between the Senate and the House are better than they were 24 hours ago. We’re getting close,’ the Associated Press reports House Majority Leader Steny Hoyer saying on Tuesday. Finding a compromise that will earn 218 votes in the House and 60 in the Senate is not inevitable, but it’s doable. And with President Obama more personally involved in the health care reform negotiations now than he has been in the past year, the chances of finding that combination of trade-offs is closer than ever.

There are other tea leaves increasing the likelihood of a health care reform bill becoming law in the next few weeks. Senator Reid made some fairly obvious deals to get the 60 votes he needed to move health care reform out of the Senate. The most egregious was promising to pay Nebraska’s increased Medicaid costs in perpetuity at the request of Senator Ben Nelson. Republicans jumped all over that deal. Even the Republican Governor of Nebraska attacked the deal.

Well, fine. Senator Nelson can now head back to Nebraska and show he fought hard for the state, but Governor Dave Heineman killed the deal. (At the moment, Senator Nelson is calling for all states to get the same Medicaid relief as he negotiated for his own state). Yet Senator Nelson is still likely to support whatever health care reform bill emerges from the current negotiations, unless the abortion language is significantly weakened. What else can he do, proclaim that unless Nebraska gets a windfall he’ll torpedo reform for the rest of the country? So what’s likely to happen is that the GOP will likely to embarrass Democrats into eliminating the most glaringly unjustified deals, but not strip away any votes as a result. Meaning the bill will be “better” (for containing less pork), but will still keep the votes recruited by the eliminated pork.

Another reason health care reform is likely to pass is that Democrats can’t afford to have it defeated. The Democratic Congress has actually accomplished a significant amount in the past year (you may not agree with what they’ve done, but they’ve done a lot). That’s the argument made by Newsweek columnist Jonathan Alter. But in the public’s mind, Congress will be judged by what they do on health care reform. Their constituents, both at home and in the political arena, are demanding results. If they pass something now they will have 10 months to convince voters their fix is better than the status quo. If they fail, they will demonstrate they’re a do-nothing Congress. In these circumstances, something is better than nothing.

Painting a scenario in which health care reform goes down in flames is easy. And I’m not saying health care reform is inevitable. But this Congress and this President have gotten closer to passing health care reform than any lawmakers since the push for comprehensive reform began in the 1940s. President Obama and Democrats in Congress have bet their political credibility on producing a bill. They’re close to the finish line. Odds are, they cross it.

Of course, signing health care reform legislation into law is only the beginning. But that’s a topic for a future post.

One person’s socialism is another’s sellout. At least that’s the way it seems to go when it comes to health care reform. And it certainly must appear that way to House Speaker Nancy Pelosi who today unveiled the Affordable Health Care for America Act. HR 3926 blends together provisions from the three House Committees that have produced health care reform legislation: the Ways & Means Committee; the Education & Labor Committee; and the Energy & Commerce Committee. The result is not as liberal as some on the left called for and is too radical for those on the right.

As CBS News reported, those on the left are upset that the bill would create a government-run insurance plan that would be required to negotiate rates with providers much as private carriers do. This angers liberals who want the public health plan to set rates that providers would have to accept, much as is done with Medicare and Medicaid.

Is it socialism? A sellout? A good idea or a bad idea? Most readers of this blog can guess my answers (for those interested, my view of it is at the end of this post). Here’s how others are discussing the legislation:

The National Underwriter does a great job of identifying where some of the controversial provisions in the bill can be found. While the publication is a bit too fixated with the number of pages in the House health care reform bill (1,990), it’s still a good starting point for understanding the legislation. And it points out that the bill does nothing to prevent brokers to sell products within the Exchange, so it offers a bit of a reassuring start, too.

Reimbursing doctors for providing end-of-life counseling remains in the House health care reform bill. Given that some conservatives described this provision as creating “death panels,” preserving this element of the bill can be viewed as an act of political courage. As I’ve posted before, the death panel claim was more of a cruel hoax on the American people than an insightful read of the legislation. But the passions and paranoia surrounding the provision was so vociferous, the easy course would have been to simply drop it from the bill – as was done in the Senate. The Oregon Congressman, Earl Blumeauer, who championed inclusion of the counseling provision in the health care reform package, says he was motivated by a talk with a Southern Minister who told him ‘It’s very important for those of us in the clergy that this provision be kept, cos’ we see situations where families don’t get the help they need, and we have to try to counsel them through.”

My take on the House health care reform bill is that it’s not socialism nor a sellout. It is a politically necessary step down a long road. As regular blog reader Alison noted in her comment on an earlier post concerning Senate Majority Leader Harry Reid’s efforts to forge health care reform legislation that can muster 60 votes in the Senate, “… if you start off extreme then there is more room for negotiation to where he (Senator Reid) most likely anticipates its going anyway. If you give away the farm at first you have nothing left in your hand to negotiate with. I do not believe he anticipated this to fly at all but rather offers it as a calculated starting point.”

Alison’s point applies equally as well to Speaker Pelosi’s health care reform bill.

Health care reform is a process. First there was the pre-legislation discussion of what health care reform should do. Then there were the debates in various committees in which those intentions were put into bill form. Now the leadership of each chamber are blending the work of their committees into single bills. Next will come a conference committee tasked with combining the two bills that emerge from the Senate and the House of Representatives into a single bill. At each step along the way positions harden, the rhetoric (hard to believe it’s possible) becomes even more shrill, and the compromises more plentiful. But at each stage, the final legislation becomes more clear. After all, if the House Leadership is going to push moderate Democrats to vote for a public option of any kind, a vote those moderates will need to defend at election time, they must believe it is going to be a part of the final reform package. (At least those moderate Democrats hope so).

The Affordable Health Care for America Act will look more like whatever finally emerges from Congress than the bills passed by the three House Committees. But it’s not the last word. The blended Senate bill has been described, but not seen. Both the House and Senate proposals will be evolve. We’re several weeks away from seeing the legislation that will emerge from the conference committee.

The worthiness of the result, as always, will be in the eye of the beholder.